Can I use a personal loan to buy a small home?

Some buyers use a personal installment loan, which is a lump sum repaid in fixed amounts over months or years, but the loan is not tied to the property the way a mortgage is. The CFPB says lenders set terms based on your credit score, income, existing debts, loan size and length, and any state interest-rate caps. Rates can be fixed or adjustable. Fees can include origination, documentation, and late fees, plus optional credit insurance, and they raise the total cost. Loan amounts and terms are typically smaller and shorter than mortgages. Read the required disclosures, compare the APR from several lenders, and check that the monthly payment fits your budget before signing.

Check your local rule. This varies by state, county or city. Your permitting office has the final word; the official lookup pages below show you who that is.

Sources

• What is a personal installment loan?Consumer Financial Protection Bureau
• Do personal installment loans have fees?Consumer Financial Protection Bureau